Joint tenancy or tenancy in common?

Question

Brandon Hall · Answer

Both have their pros and cons but for your situation, it sounds like you will be much better off forming an LLC with a 50-50 split, then putting the title of the property in the name of the LLC.

Christie A. · Answer

Jesse, when you said:

"We had to take ownership of the properties in our name at closing them  grand deed them over to the LLC, however, we usually do the paperwork at  closing as well, cost about $100 a property."

Does this mean your purchase contract and deed indicated tenants in common at closing, and your mortgage  is also under you and your partner's name?

Jarod Bona · Answer

It is usually a bad idea to set up a joint tenancy unless it is a unique situation or perhaps you are purchasing with a family member. If the deal is with another co-worker, you certainly want to avoid joint tenancy. With a joint tenancy, when one party passes, the other party receives the entire ownership. The party that dies does not pass the share to his or her heirs.

People often confuse joint tenancy and tenancy in common (where the share does pass to one's heirs).

Jesse Waters · Answer

I put all my properties in LLC, that way if something happens we only have to deal with the ownership percentage of the LLC rather than directly dealing with any of the properties & probate.  We had to take ownership of the properties in our name at closing them grand deed them over to the LLC, however, we usually do the paperwork at closing as well, cost about $100 a property.  Going with the LLC will also give you a bunch of extra protection in the event a tenant files suit against you, they will only be able to go after what is held in the LLC and not attack any of your personal assets.  Just make sure that you LLC is set up prior to trying to move the title over & you keep everything related to the LLC separate, you must maintain the corporate veil, otherwise your LLC protection isn't worth the paper it's written on.  This isn't legal advise, I suggest a chat with a lawyer.  Best of luck.

Jim Viens · Answer

Joint Tenancy is an arrangement whereby if one of the joint tenants dies, the remaining joint tenants receive the deceased person's interest in the property. Tenants in Common forces the deceased tenant's interest to go through probate. I agree with @Brandon Hall . You should probably set up an LLC and do it that way. MUCH less mess if something were to happen.

Joint tenancy or tenancy in common?

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